Connect with us

Subscribe for latest updates

Best Performing ETFs of 2011 – Leveraged and Traditional Classes

by ETF Base on January 1, 2012

With 2011 wrapping up, we saw US indices close roughly flat on the year (slight gain on the Dow and a huge move for the Dogs of the Dow especially, at 17%), but global markets swooned, especially those in the developing world and Europe. It shouldn’t come as a major surprise then, that the major story for 2011 in ETFs was that of the Treasury ETF. While a great strategy historically has been to short Treasuries with out of the money calls, even that strategy failed on certain occasions when the underlying ETFs moved too quickly and positions had to be covered. Other trends and stories will be evident below in the Top 10 for each class – both leveraged and non-leveraged ETFs. I wanted to include non-leveraged since it gives a more true picture of the actual top performing sectors, as not all sectors have a 3X leverage equivalent and most leveraged ETFs go to zero eventually, further distorting real gains from the underlying sectors.

Admittedly, the non-leveraged top ETF list is pretty boring to look at – it’s all Treasuries! But that was the story of 2011 – the flight to safety. For a large part of 2011, it was a flight to gold as well, but as I warned in September in 5 Reasons to Avoid Gold ETFs (when gold was appreciably higher than it is now in spite of Russia, Iran, Egypt and Europe worsening), that story may well have been played out regardless of what happens in the near-term.